Nonlinear Dynamics of Islamic Fixed Income Securities : Evidence from Generalized Chaos Analysis Framework

This study endeavors to unravel the structured and sequential intricacies underlying the empirical da-ta-generating process (DGP) and the captivating evolutionary dynamism of Islamic fixed income securi-ties. To achieve this goal, we delve into the realm of nonlinear dynamics governing the Dow Jones Sukuk Index, employing the rigor of six consecutive steps of the generalized chaos analysis framework. We utilize reconstruction techniques to visualize the peculiar (fractal) system attractor. Using recurrence quantification analysis and multifractal analysis, incorporating power-law distribution coherence tests, we assess emerging dynamics within the data. The results suggest that the time series blend qua-si-periodic cycles and deterministic (chaotic) behavior. Moreover, time series exhibit multifractal scaling properties characterized by power-law distributions. The analysis provides insights into the complex and nonlinear nature of Sukuk dynamics and enhances understanding of Sukuk’s underlying mechanisms and behavior as a financial instrument. The results can benefit researchers, policymakers, and market participants in making informed decisions regarding Sukuk investments and risk management